A new decision was made by Saudi Arabia’s Capital Market Authority (CMA) to allow the institutions of the financial market to accept the subscriptions of non-Saudis in the real estate fund that invests part or all of its assets in a real estate located within the boundaries of Makah and Madinah.
In its statement on Monday, the authority calls for the financial institutions to adhere to the provisions of the law that allows non-Saudis to own and invest in real estate of investment funds located within the boundaries of the cities Makah and Madinah, or when liquidating those funds.
Adding that such a decision would contribute to lean on the financial market as a miscellaneous financing channel, as well as reinforcing the pillars of the Saudi Vision 2030, which aims at improving the Saudi financial market to be attractive to local and foreign investment, and able to play a critical role in the economic development and the diversity of income sources.
This new call for the CMA aims at boosting the role of investment funds as a tool for financing within its strategic plan. Moreover, the funds will contribute to financing many basic activities in the economy, such as the financial sector, real estate, and the sector of small and medium companies.
“Allowing non- Saudis to invest in real estate funds in Makah, Madinah would have a positive impact on real estate funds of all kinds” said Alaa Al-Ibrahim, Head of the Capital Markets Funds Sector at Alawwal Capital.
Speaking to Al-Arabiya channel, he also said that this decision would pave the way towards many investors who want to invest in real estate in the two cities; it also removed a major obstacle for residents in the Kingdom and those abroad to invest in these funds.
Al-Ibrahim said the decision also highlights the issue of non-Saudi ownership of the real estate in the event of the fund being liquidated.
“In the event of any liquidation, the non-Saudi investor must receive the liquidation value in cash and does not own the property in-kind contribution.”
Under the new decision, the CMA is expected to set controls that would allow companies listed on the Saudi market that target Makah and Madinah, and there may be a special regulation for public joint-stock companies and investors to invest in these companies.
Al-Ibrahim does expect CMA would allow investment by non-Saudis in these companies directly and shortly.